Rupert Murdoch, Once the Outsider

TWO decades ago, Rupert Murdoch saw the Wall Street Journal as just the kind of complacent, establishment player he built his empire by taking on.

“There is room at the top of the market to attack The Wall Street Journal,” he told one of the newspaper’s reporters in a 1988 interview. He had just bought a major stake in Pearson, the British owner of The Financial Times, in an unsuccessful attempt to entice the paper into a joint invasion of The Journal’s home turf.

It was the kind of idea that Mr. Murdoch has often exploited. His genius, his advisers say, has been a knack for spotting flabbiness in establishment interests that appeared impossible to unseat, and putting up competitors to do it — from the former “big three” television networks, CNN before he started Fox News and the BBC before British Sky Broadcasting.

With that history, some observers wondered last week why Mr. Murdoch, instead of launching a competitive assault, had offered $5 billion to take over Dow Jones & Company, publisher of The Wall Street Journal.

It is a posture that may date back to his days at Worcester College, Oxford, in the mid-1950s, when he was an Australian provincial who disdained the clubby social scene, dabbled in leftist politics, and kept a bust of Lenin in his study. “Rupert is good as a kind of revolutionary,” said Irwin Stelzer, an economic consultant and old friend to Mr. Murdoch. “That is what gets his juices flowing. He sees entrenched monopoly power and he knows that that has inefficiencies.”

Dow Jones might appear to be such a target. But instead of competing against it, Mr. Murdoch is offering a lofty price to take it over, suggesting to some that Mr. Murdoch, 76 and a confessed romantic about newspapers, may be himself mellowing into the establishment.

“God knows, he has left his mark on the media business and our culture and the news,” said Mr. Pearlstine, now a senior adviser for the Carlyle Group, the investment firm. “But at age 76 this would create at least the opportunity for Murdoch to leave a stamp at a whole other level.”

Mr. Murdoch has bought well-known properties before, but he never made a run at exactly such an icon. He has shopped for smaller components that he would eventually deploy to challenge giants. In an attempt to expand from news to entertainment in the early 1980s, for example, Mr. Murdoch successfully bought control of 20th Century Fox, a venerable but faded studio laboring under a load of debt piled up by the oilman-turned-mogul Marvin Davis.

A few years later, Mr. Murdoch then put the studio’s executives — notably chairman Barry Diller — and its film library to use building the Fox television network to challenge the former “big three.”

Although a conservative in politics, Mr. Murdoch has posed as a rebel in business. His British Sky Broadcasting company ended the hegemony of the state-owned BBC in Britain. His Fox News Channel surpassed the once-dominant CNN in ratings. And for two decades, he terrified United States cable companies with his attempts to build or takeover a satellite television service. (He eventually bought and then sold control of DirecTV, after he had used the additional clout to negotiate terms for his Fox networks with cable providers.)

Even his London newspaper purchases were an assault on an entrenched power — the Fleet Street unions. He first bought tabloids like The Sun, receiving the nickname “Dirty Digger” for their sensationalism. And he later rattled that city’s journalistic establishment by buying the prestigious Times and Sunday Times. Both Times newspapers were running big losses at the time, and neither had the same unique place in their market that The Journal does around the world.

He later acknowledged that his British newspaper purchases amounted to a make-or-break bet for his company that he could crack the power of the unions that had set the terms for all of Fleet Street.

Mr. Murdoch’s advisers and allies acknowledge that, unlike many of investments, buying The Journal would give him an emotional payoff akin to a sports fan taking the deed to a favorite team. But they argue that he may have less sentimental plans in mind as well.

To begin with, Mr. Murdoch is currently planning an upstart business news network to rival the currently dominant CNBC. CNBC currently features Wall Street Journal news and reporting as part of an exclusive deal with Dow Jones. Stealing that alliance or even incorporating The Journal name could be a major advantage to the new network, and a successful cable network like CNBC alone might be worth as much as the $5 billion purchase price.

Then there is Europe and Asia, where Mr. Murdoch already owns major news and broadcasting interests. One adviser to Mr. Murdoch, speaking anonymously to talk freely, said he aims to greatly expand The Journal’s Asian and European editions.

Another adviser, Stanley S. Shuman, of the investment firm Allen & Company who has worked with Mr. Murdoch for more than 30 years, said, “The Journal is a franchise he would like to own but not just for the sake of owning it. He feels he can help them realize their business potential.”

As for the Bancroft family, which controls Dow Jones and has so far declined to sell, Mr. Shuman said Mr. Murdoch “is willing to make the promises necessary.”

Mr. Murdoch knows a little about family businesses. He has indicated he hopes that one of his six children may succeed him running his company, News Corporation. It, too, is now an established player that dominates media markets around the world — perhaps a ripe target for some future Rupert Murdoch.